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LM Wind Power Group made continued progress despite being faced with a range of external pressures, maintaining profitability for 2011 with revenue of € 707.5 million and EBITDA of € 73.9 million. The results are in line with expectations for the year, yet disappointing and lower than last year.

The revenue for LM Wind Power 2011 was € 707.5, a decline of 2.7% compared to the € 727.5 million reported in 2010. Profit margin (EBITDA) on ordinary activities, before impairment and special items of € 73.9 million was down 40.9% from € 125.1 million the previous year. In June, EBITDA was € 59.5 million, a 26 % increase versus 2010. In China there was an improvement in year on year sales and EBITDA, clear evidence of the company’s strong position in this critical market. Margins held despite significant price pressure. In Europe, there was 16% growth in sales. In India, there was major growth with sales and EBITDA also up. In North America, a temporary downturn in orders was compensated by a headcount reduction of 180 employees to protect profitability. Service and Logistics capacity utilization improved and the warranty backlog was reduced. Svendborg Brakes maintained acceptable margins despite strong challenges in the marketplace. However, in the third quarter, the company began to feel the full effects of a variety of unexpected headwinds in the different markets in which it operates. The consequences of the European financial crisis became more evident, in China the government began to temporarily re-balance renewable energy capacity and our customers were forced to confront significant challenges which in turn affected LM Wind Power. The company initiated a variety of proactive measures in advance of these impacts which protected the full year results to some degree. A detailed focus on cash generation and process improvements began to yield results. 2011 also saw a peak spend of € 42.9 million on resolution of mainly historical warranty issues. Exceptional items accounted for € 32.1 million incurred to support delivery of an overall € 129.3 million of annual costs savings. To optimize the global manufacturing footprint, the company downsized its largest plant in Spain at Ponferrada. Likewise in China, production temporarily ceased at one plant, Urumqi, in a further cost saving move.
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